The cost of the Fed and the Federal government's reckless response to 2008's "Great Recession" is finally coming due and with it, bringing a new even more ominous, economic calamity.
Oh boy... that's really hard to say but if history is to be a guide though, housing declines have always materialized over multiple seasons. There are just so few transactions for the price discovery process. Its like the stock market in super slow-mo. That said, if mortgage rates continue to reset upward so aggressively and the stock market were to really crash hard, I think housing could collapse post-haste. Mortgage rates > 6.5% would really freeze things up. The negative wealth effect from stock market declines has always shown to be fundamental. Also, as the economy continues tipping into recession, the employment picture is going to sour really fast which also will have a significant impact. We will see!
Great info thank you! I'm getting so tired of the realtors/articles saying "buy now its only going to get more expensive", "housing market is nothing like 2008 and what happened then, it will only MAYBE be a slight correction but interest rates will be higher so it wont matter blah blah". Or that other article floating around that housing market has only "crashed" in very few recessions. There are truly eye brow raising red alarming flags happening in the economy now and I feel we haven't even reached the tipping point of the consequences, Michael burry recently said he feels the stock market is only at halfway of the probable decline.
it feels like the decline in all things has really just started. When do you feel we will reach the bottom, especially with housing?
Oh boy... that's really hard to say but if history is to be a guide though, housing declines have always materialized over multiple seasons. There are just so few transactions for the price discovery process. Its like the stock market in super slow-mo. That said, if mortgage rates continue to reset upward so aggressively and the stock market were to really crash hard, I think housing could collapse post-haste. Mortgage rates > 6.5% would really freeze things up. The negative wealth effect from stock market declines has always shown to be fundamental. Also, as the economy continues tipping into recession, the employment picture is going to sour really fast which also will have a significant impact. We will see!
Great info thank you! I'm getting so tired of the realtors/articles saying "buy now its only going to get more expensive", "housing market is nothing like 2008 and what happened then, it will only MAYBE be a slight correction but interest rates will be higher so it wont matter blah blah". Or that other article floating around that housing market has only "crashed" in very few recessions. There are truly eye brow raising red alarming flags happening in the economy now and I feel we haven't even reached the tipping point of the consequences, Michael burry recently said he feels the stock market is only at halfway of the probable decline.
No probs... I do also think we are going to see an epic stock sell-off and basically the worst perfect storm for the macro-economy. Housing could take a while to buckle under though. I'm tracking the Minsky Moment on stocks here: https://twitter.com/soldatthetop/status/1544804363373346818 also, here is some background: https://papereconomy.substack.com/p/countdown-to-minsky-moment